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Sunday, May 8, 2011

Police building deal back on track

May 7, 2011

The public protector has stepped in to urgently block another shady police lease deal involving controversial businessman Roux Shabangu - this time worth R1-billion.

Roux Shabangu in his helicopter flying to his farm in Mpumalanga

This week, Shabangu, the man at the centre of the dodgy R500-million police lease scandal exposed by the Sunday Times last year, emerged as the frontrunner to win the tender for a new provincial police headquarters in Durban.

Minister of Public Works Gwen Mahlangu-Nkabinde has yet to explain her decision to reinstate Shabangu's R500-million lease with the SA Police Service (SAPS) in Pretoria - after two legal opinions declared it unlawful and a damning report by public protector Thuli Madonsela called for it to be halted.

A previous bid to award the deal in Durban to Shabangu without going out to tender was halted after the Sunday Times exposed it last year.

That deal, which would entail moving the provincial police brass to the Transnet building that Shabangu was negotiating to buy, is still being scrutinised by Madonsela and the Special Investigating Unit.

The Transnet building was subsequently sold to someone else for R15.8-million - equivalent to three months' rent if the earlier deal had gone through, at a cost to taxpayers of over R700-million.

But, in April this year, months before Madonsela was due to complete her current investigation, the Department of Public Works put the same deal out to tender again.

Bid documents and internal correspondence seen by the Sunday Times show the new tender specifications contain the same needs assessment used to justify the scrapped Transnet building deal.

Madonsela became aware that public works had issued a new tender only after the Sunday Times asked if the department had got her blessing.

"No. The public protector was surprised to learn that tenders are already (being) considered by the department," her spokesman, Kgalalelo Masibi, said.

The fact that the same much-criticised needs assessment was being used to justify the new tender meant it had to be "held in abeyance", she said.

"The public protector will urgently approach the minister of public works in this regard."

The two processes were "directly linked" and the public protector's yet-to-be-finalised report on the scrapped Durban lease could affect the tender process, she said.

Attendees at a bid meeting in Durban this week said the new R1-billion tender appeared to have been tailored to ensure Shabangu won.

It calls for a 45499m² building with 451 parking bays - three times the size of the current SAPS Durban headquarters, Servamus Building in Bram Fischer Road.

Property industry insiders said Shabangu recently paid a R2-million deposit to secure the 46000m² Redefine Towers at 320 Dr Pixley Kaseme Street (formerly West Street). "(It) seems they wrote the tender for the building," said one insider close to the bid process.

Redefine confirmed it was negotiating the sale of Redefine Towers, but declined to divulge any details. "We deem that information confidential," Redefine's chief operating officer, David Rice, said.

Redefine Towers has limited parking, but Shabangu recently applied to take over the council lease for Pine Parkade next door, which would make up the shortfall.

Municipal officials confirmed that Shabangu had applied for the parkade lease and that the request had been conveyed directly from city manager Mike Sutcliffe.

Sutcliffe said there was "nothing unusual" about Shabangu approaching him directly. "I think that his company has either bought or is buying 320 West (Redefine Towers)," said Sutcliffe. "I said, 'No problem, let me give it to the real estate department.'"

Of six bids that were opened in front of the bidders at the public works office in Durban on Wednesday, officials raised concerns about all but Shabangu's.

Some bidders were told their bids lacked certain certificates, according to three people who attended the meeting, but did not want to be named. One bidder was reprimanded for using Tippex.

"Shabangu sat in the front row in a white and blue striped shirt," said one. "His bid was opened first. Nobody had the correct certificates except Roux Properties."

This was confirmed by another bidder: "We were de-facto disqualified."

Bidders were told they'd be informed within two weeks if their bids were going to the national bid adjudication committee in Pretoria, which will make the final decision.

Those who attended said Shabangu's was the highest bid, at R127/m², although this could not be confirmed. Even R100 to R110/m² with an annual escalation of 8% to 10% - proposed by police procurement bosses last year - would bring the bill to between R879-million and R966-million, excluding relocation costs.

Police are paying R65/m² for their provincial headquarters at Servamus. Swish Properties, the company that owns Servamus, declined to comment.

Documents seen by the Sunday Times show police commissioner General Bheki Cele approved the need and funding for a massive threefold increase in provincial head office space - despite objections by senior public works and police officials.

A particular concern was placing child protection, sexual offences and family violence units - including counselling and treatment rooms - at head office.

The SA Police Union (Sapu), which claims 70000 members, said there was no justification for the tender. "There's nothing wrong with the current building - it's not even overcrowded," said Sapu general secretary Oscar Skommer.

He was outraged at plans to put child protection units at head office. "Those units must be at station level. Who is going to help these people when they go to the police station to open a case?"

But police spokesman McIntosh Polela said the SAPS was "on record" that it would "not move forward" on the new Durban lease until the public protector's investigation into the old one was complete. "The SAPS was invited by public works to confirm whether its needs were still as before, and this it did."

Polela denied communities would lose essential services, as only unit managers would be housed at head office. "This does not mean that the services will be removed from (the) stations. The units will continue to serve the communities."

Shabangu asked for questions in writing, then declined to answer them "until such time as (the tender process) has been completed", his lawyer, Francois Botha, said.